Hidden Business Costs You Should Know About

While planning your business, it is customary to ensure that the finances are strong and expenses are carefully designed. When most men make a business plan, they are focused on the cost of premises, employee costs etc. However, there are other small bills that they need to focus on. The cost of gas and electricity can add up over time. These costs are unavoidable but are frequently overlooked by business owners.

Here are some costs that you need to be aware of while planning a business.

Gas and electricity bills

We looked at data collected Business Energy. It suggests that a micro business in the UK can use 625 kWh of electricity per month. This will lead to an average of 7,599 kWh. As a result, business owners end up paying upwards of 1,062 pounds annually, only in electricity bills.

A small business can consume 1,250 kWh per month or 15,000 kWh per year with a total annual electricity bill of 2,038 pounds. A medium sized business will consume 2,083 kWh per month or 25,000 kWh per year with total annual bill of 3,146 pounds. Industrial businesses end up paying 7,346 pounds annually on electricity bills with 60,000 kWh consumption per year or 5,000 kWh per month.

But wait, this is only the bill for electricity. If we add gas connections to the business expenses, the figures are even higher. A small business can pay 430 pounds annually for 10,000 kWh of gas consumption. Medium sized businesses consume 25,000 kWh and pay 856 pounds annually. Larger businesses consume 45,000 kWh per year and pay 1,424 pounds for the same.

If you are a small business in the UK, your gas and electricity bill could total 2,468 pounds annually. If you don’t keep track of these expenses or try to trim the ends, these bills could be higher. Hence, ensure that you find the best rates for electricity and gas. Spend some time in finding the best ways to reduce energy costs and save more. You can easily save 45 percent of your gas expenses with some comparative shopping alone.

Employee costs

As a business owner, you are not merely paying for you are not merely paying for the work employees do for you. You will also have to focus on training costs, maintenance of records and a few free lunches and office events too. These costs are unavoidable as the business owner must create a friendly and workable atmosphere in his premises. If he fails to do so, it would be difficult to manage his company.

In the first instance, these could look like unnecessary expenses. However, you must note that they are needed to create a good company culture. They help win over the loyalty of your team and make them more likely to work better. Look for these employee costs and set aside a budget for these as well. If you don’t pay attention, they could easily erase all your profits. Hence, budgeting is essential.

Moving with changing times

The intranet and software used by your company will need timely and regular upgrades. Can you use computers from 1995 for working today? Of course not. Can you depend on a firewall and safety system that was designed in 2007 and hasn’t been updated since then? No.

Such expenses will be hard to handle if you don’t have a plan. Your hardware may become obsolete after some time and software will demand upgrades. Additionally, your company will need new safety and security systems; there could be new methods of handling business, new accounting systems and more. In fact, policy changes may make it mandatory for you to shift to more technologically advanced devices etc. You may have to ensure that you level up your premise’s security or provide a new facility to the employees. Prepare for these expenses in advance.

If you are careful and plan well, such hidden expenses can be managed with ease. Make sure that you look at every aspect of a business before starting one.

Written by Karl Peters

Karl is a university graduate with years of experience in casual writing and freelance services. Always up to date on the latest trends and working hard to bring these trends to the forefront of the public eye. Lover of beer, dogs and cars and dedicated to being the best bachelor bro.